Quick answer:
Under Making Tax Digital, digital records mean an individual digital record of each transaction, capturing the date, the amount, and the category, kept in MTD-compatible software, not a paper logbook, a photo of receipts, or a monthly summary lumping transactions together.
The “digital records” requirement is stricter than many expect. Here’s precisely what HMRC wants.
What must a digital record contain?
For each transaction, you generally need to capture three core things:
- The date of the transaction
- The amount
- The category (the type of income or expense)
This applies to all income and all expenses, recorded transaction by transaction in compatible software. See the foundations in digital record keeping for HMRC.
Why aren’t summaries allowed?
The critical change from old habits is that summary entries aren’t acceptable. You can’t lump a month of office supplies into a single line or record weekly totals. Each individual transaction needs its own digital record. This catches out people used to writing “£300, supplies, March” in a notebook.
What does NOT count as a digital record?
- A paper logbook or handwritten ledger
- A photo or scan of receipts alone (helpful evidence, but not the digital record itself)
- A monthly or weekly summary grouping many transactions
- A spreadsheet that isn’t bridged to HMRC with a digital link (see can I use spreadsheets for MTD?)
Do you still need to keep receipts?
Yes, you should still keep your receipts and invoices as supporting evidence, but the *digital record* is the transaction entry in your software, not the receipt image. The two work together: the record states what happened, the receipt proves it.
Is there any easement?
Yes, in specific cases, for example, jointly owned property allows category-level records rather than per-transaction (see MTD jointly owned property), and some foreign property expenses can be totalled (see MTD foreign property income). But for most income and expenses, individual records are the rule.
How CleanBooks AI keeps compliant records automatically
CleanBooks AI creates a compliant digital record for every transaction automatically, the bank feed captures date and amount, and Keeva™ assigns the category. There’s no manual logging and no risk of accidentally summarising, because each transaction is recorded individually by design. See how AI bookkeeping works.
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